China's New Energy Vehicle Supply Chain Enters Indian Auto Market via Indirect Partnerships

According to data released on June 25, 2025, India—the world’s third-largest automotive market—recorded passenger vehicle sales of 4.489 million units and commercial vehicle sales of 1.027 million units, bringing total motor vehicle sales to 26.8 million units, a 5% year-on-year increase. With only 34 vehicles per 1,000 people, India’s car ownership rate remains far below China’s approximately 260 per 1,000, highlighting significant growth potential. Following border tensions in 2020, India tightened scrutiny of Chinese capital inflows and raised approval thresholds for direct investments in whole vehicles and large-scale joint ventures. Despite this, China’s new energy vehicle (NEV) supply chain has successfully entered the Indian market, primarily through indirect cooperation models such as component supply, technology licensing, and supporting joint ventures. India faces urgent, structural demands to upgrade its domestic manufacturing capabilities and strengthen its electric vehicle (EV) supply chain. China, with its comprehensive capabilities in the “three-electric” systems (battery, motor, and electronic control), holds distinct advantages in cost efficiency and project execution speed. Chinese NEV components are increasingly integrated into India’s automotive supply chain, disrupting established foreign supplier networks through lower costs and faster production ramp-up. In India’s passenger vehicle segment, Suzuki has long dominated with roughly a 43% market share, with Japanese automakers leading through compact internal combustion engine vehicles. However, their progress in building EV production capacity has been slow. Meanwhile, Indian automakers are leveraging Chinese supply chains to reduce EV manufacturing costs and gradually capturing market share from incumbents.